Building Capacity

July 22, 2015

Great Lakes Seaway Review
Janenne Irene Pung
April-June 2015

Building Capacity
Investments continue to expand domestic, international fleets

Two lakers ordered from a Croatian shipyard. Delivery of six Seaway-sized ships for international carriage. Additional orders for European connections. Launch of a new forebody to be paired with a former Danish-flagged aft end.

Investments in fleet renewal continue. The latest string of orders and deliveries are part of a $4 billion investment in a new generation of vessels sailing the Great Lakes/St. Lawrence Seaway system. The ships come equipped with the latest hull designs and equipment—increasing efficiencies and environmental performance.

During the 2015 season, Fednav is receiving delivery of six Seaway-sized vessels. They are part of a 27-ship order, 14 of which are lakers. The ships share environmental characteristics of six lakers previously built at Oshima Shipyard in Japan—consuming 28 percent less fuel and producing 28 percent fewer emissions than vessels built a decade earlier.

"We're pretty proud of the new ship's efficiencies," said Marc Gagnon, Fednav Director, Government Affairs and Regulatory Compliance. "A combination of the new engines and hull form are creating the in-crease in efficiency. We have our own naval architect working with the shipyard."

The ships will be part of a fleet of 40 lakers servicing FALLine, a scheduled cargo liner service operating between Great Lakes ports and Europe since 1996. This iteration of Fednav's order differs from earlier deliveries in a key area: design. The vessels have box-holds for improved loading and unloading of cargo like steel and project cargo. The six-hold vessels, each with four onboard cranes, will be used for international trade.

The first of the ships to enter the system was Federal Baltic, which arrived in May. Over the summer and into the fall, Federal Beaufort, Federal Barents, Federal Bering, Federal Bristol and the Federal Biscay are arriving. Each vessel is being christened in Japan and then put to work, picking up cargo while en route to the system.

Schematics for the bulk carriers include a beam of 78 feet, length of 656 feet and deadweight of 34,100 metric tons—only slight differences from the previously de-livered Federal Satsuki and Federal Mayumi. according to Gagnon. The new group of ships will mostly likely be flagged from the Marshall Islands, Fednav's flag of choice.

Adding ballast technology.  The last of the six Fednav ships delivering in 2015, Federal Biscay, is expected to be equipped with a ballast water treatment system. Fednav has placed an order for 12 systems for use on ships still under construction.

"After extensive analysis and testing, we are confident the technology we are choosing is an affordable and effective means to ensure that Canada meets its ballast water requirements," said Paul Pathy, President and Co-CEO of Fednav Limited. "We are proud of leading the way. along with government and industry partners, in establishing a level playing field for the Canadian, U.S. and international fleets to operate together in the Great Lakes region."

The system, BallastAce, developed by JFE Engineering Corporation in Japan, is expected to be effective in saltwater and freshwater. It uses a sophisticated filler and injects sodium hypochlorite into the ship's ballast system.

The commitment to use BallastAce comes after years of testing treatment approaches. From the Federal Yukon testing copper ions, the Federal Welland testing electrodialytic disinfectant and the Federal Venture using chlorination, the company has spent millions of dollars seeking a reliable, effective and economical solution to ballast water treatment. The system is in the U.S. Coast Guard's approval process for certification at the Great Ships Initiative and Maritime Environmental Resource Center facilities in Superior, Wisconsin and Baltimore, Maryland, respectively.

Algoma expands renewal program. While eight new lakers are delivering from China, including the two owned by CWB, Algoma Central Corporation is expanding its order for new vessels. Two Equinox Class 650-foot self-unloaders are on order from 3.Maj Brodogradiliste d.d. Shipyard in Rijeka, Croatia. The contracts include a contingency on the shipyard meeting pre-determined construction installments.

The ships will have the same technology and equipment as the first order of Equinox vessels, including exhaust gas scrubbers to remove at least 97 percent of all SOx emissions from the exhaust. However, the 650s are smaller than the original Equinox Class vessels, made specifically to move aggregates, salt and other products into and out of Canadian and U.S. pons with shallower harbors in the Upper Lakes. Both ships will have forward discharge booms like Algoway and Algorail and will carry in excess of 24,000 metric tons at maximum Seaway draft. They will also have bow and stern thrusters for maneuvering through the shallow harbors.

"The specialized service needs of certain customers require the size and type of vessel that Algoma has consistently provided," said Ken Bloch Soerensen, President and CEO.

"We're making the ships as similar as possible in terms of their power plants, main layouts and equipment so our crew and personnel can be on any full-sized Equinox Class ship or die 650s and benefit from the standard efficiencies," said Wayne Smith, Algoma Central Senior Vice-President, Commercial. "The new order is exciting. Our older 650s are tremendous workhorses on the Great Lakes in terms of the port calls they make each year and the cargoes they carry."

The new vessels will be replacement ships. The first of the ships is expected to enter service in early 2017, with the second following later that year. Algoma Central last used the Croatian shipyard in the 1980s to construct Algoma Discovery, Algoma Guardian and Algoma Spirit.

In addition to the newbuilds, Algoma has purchased a 2009-bui1t self-unloader from Gypsum Transportation Limited. The ocean vessel has been renamed Algoma Integrity and has become part of Algoma's Canadian coastal class vessels, which includes Algoma Mariner and Radcliffe R Latimer. She is 646.7 feet long, 105.6 feet wide and has a summer draft of 37 .7 feet.

"The ship is well constructed and was designed to carry heavy cargoes," Smith said. "The addition of Algoma Integrity  to our Canadian-flag fleet gives us added flexibility to meet the needs of our customers."

While the full oceangoing vessel will begin service between Montreal and the Gulf of St. Lawrence, she will eventually become part of the company's international pool of self-unloading vessels. One of the first orders of business was transferring her to the Canadian flag.

The vessel purchase and the order for two new self-unloaders represents an investment of C$160 million, bringing the company's fleet renewal and expansion investment to C$560 million since 2009.

Rand adds river-class vessel. Launching a new forebody for a repurposed self-unloader brings Rand Logistics one step closer to delivery. The new forebody is being affixed to the after section of a previously acquired Danish-flagged vessel. Upon completion, the vessel is expected to become the first new Canadian-flagged river class self-unloader introduced to the system in more than 40 years. The new vessel is expected to arrive in the system during the fourth quarter.

"The new vessel is fully booked with long-term contractual business and is expected to be the most efficient river class vessel on the Great lakes," said Capt. Scott Bravener, President of Lower Lakes Towing. "The introduction of this vessel into service is one of the elements of our strategic plan to improve our return on invested capital and, based on our current expectations, the new vessel will be accretive to return on invested capital in its first full year of service."

Work on the vessel is occurring at Chengxi Shipyard in China. She previously sailed as M/T Lalandia Swan as a liquid bulker for the Denmark-based company Uni-Tankers. She was built in I99I at Uljanik Shipyard in Croatia.

New propulsion equipment for the ship includes an 8,000 hp B&W 5L50 MC main engine, shaft alternator, exhaust gas boiler and two new Tier 2 MAN/B7W 6L2I/3I 1,250 kilowatt generators. A new high efficiency propeller is being fitted and the stern tube is being converted to water lubrication.

With the new vessel, Rand's fleet grows to 16, l0 Canadian-flagged and six U.S.-flagged ships.

More developments with new salties. Montreal-based Canada Steamship Lines is also part of the system's shipowners' $4 billion investment in vessels.

With the fleet renewal program coming to completion in late 2014, the company has added four self-unloaders and two gearless bulk carriers to its Great Lakes fleet. Like other newbuilds, the latest technology makes these ships more efficient and environmentally-friendly. Part of the order also involved five ships for the international fleet.

Regularly sailing in the system, Polish Steamship Company, or Polsteam, is spending $438 million on vessels built for the system. The company has a dozen bulkers under construction at Yangzijiany Shipbuilding in Singapore, China, most recently  adding four more Seaway vessels to the order with an option to add two additional lakers. The 36,500-dwt vessels will deliver in 2017. The first 12 vessels on order are expected to deliver in 2016 and 20l7.

According to Piotr Cichocki, President of Polsteam USA Inc., the company is dedicated to serving companies trading in the Great Lakes by retaining a young and efficient fleet.

With both domestic and international fleets investing in new vessels, key assets are beginning to sail with greater efficiencies and opportunities for the Great Lakes/St. Lawrence Seaway system.


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